Transportation and logistics is one of the major growth parameter of a country, which is responsible for a smooth functioning of the economy. It is the nervous system of a country’s economy. It is one of those old-school sectors of business, and it all started with just a wheel and a bird.
The global logistics market is a massive sector with a valuation of $4 trillion. On an average, a country accounts for anywhere between 8-20% of the country’s GDP. The Indian logistics sector accounts for 13% of its GDP, which is valued at $260bn is only a fraction smaller than Singapore’s entire economy.
Although, the Indian logistics sector recently saw a massive exponential growth rate in the last two decades, the sector still remains highly impenetrable. An unorganized sector especially in the mid and lower level of the sector, lack of proper infrastructure, the monopoly of the truck owners, the nature of partnership between the local governments, and the syndicate controlling the local logistics business are some of the reasons.
Despite of all these factors, there are new windows opening in this sector and the savior is the Information Technology domain, which has changed the paradigm of the modern day business. Introduction of technology into this ‘Lone wolf’ sector is affecting the whole ecosystem of the economy. People are shifting focus from Ed-Tech, E-tail to logistics as it will become the foundation of a growing economy.
The logistics and transportation sector itself is divided into multiple verticals, namely, Transportation, warehousing and storage, sorting facilities, inland waterways, shipping, cargo handling and the list goes on. Many of these fragmented verticals are yet to see the light of Information Technology, but the ones which have already been are the trucking sector, the e-tail logistics thanks to the booming e-commerce market and warehousing which also owes to the e-commerce sector.
So what are the possible spaces where technology is needed and can be implemented? The entire road transport, primarily the trucking sector has a huge demand and requirement of IT as a whole. The first and foremost thing that can be done is an aggregation or a marketplace for trucks where people can go and directly hire a truck as per their needs, just like a cab-hailing service. Apart from that, Indian trucks are running on almost 3 decade old technologies, so even a basic real-time tracking device is needed and would actually benefit a lot to the provider who owns or controls the trucks, along with that the trucks lack basic safety parameters even for how much load it can or needs to carry. The very basic load to speed calculation is not done while loading a truck. So, there is a huge scope for IT, in the analytics, as an e-commerce marketplace, even for hardware driven Tech companies there is a scope for introduction of real-time tracking devices, speed and time monitoring instruments. The scope of IT is vast in the logistics sector and this was just the trucking segment which amounts to more than $2 billion market share.
The time is ripe and apt for any kind of technological investment or venture in the Logistics sector since there aren’t any big players yet. So, if anyone got bit by the entrepreneurial bug, this can be a starting point because of its immortal life and a huge scope, much bigger than any other sector.